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Though the last 18 to 24 months have seen several unprecedented occurrence, there are some positive signs of a strengthening global economy. Emerging Markets this past year proved to be the shining star outperforming all other asset classes. The opposite was the case in 2008 as emerging markets performed very poorly, once again revealing that it is difficult to predict which asset class will do well or poorly in any given year. This unpredictable variant should act as a reminder that a well constructed globally diversified portfolio is a better option for long term investment and reduced risk.

In addition to emerging markets, many of the nation’s exporters have seen some great results in the 3rd and 4th quarters as foreign markets have depleted supplies at a number of US manufacturers due to the low value of the dollar. This devaluation of the US currency has been a boon to goods exported from the US and many of these manufacturing companies have begun hiring to replenish their inventories. Information provided by the US Economic Report showed that manufacturing productivity over the last 4 quarters increased 6.6% and non-farm productivity grew by 5.1%.

The year end 2009 industrial production numbers still reflected in the negative, but the improvement from 2008 was encouraging. In addition, the 02/16/2010 report showed that the US savings rate ending December 2009 had increased to 4.4%. Just two years ago the US savings rate was at an all time low averaging below 2% per year. The Index of Leading Indicators, which attempts to provide a sense of direction for the overall economy, showed improvement. The 2009 report jumped to a positive 8.1% over the -4.3% of a year ago. This alone will not solve all of our problems but it is progress.

Over the past year we have been asked quite frequently by many of you, our clients, as well as people associated with our industry and most of our own family and friends, “how are we (LJCooper) doing through all the turmoil of this recessionary period?” The answer we give is sometimes met with a little skepticism or even brief disbelief. Due to the number of struggling firms I’ve almost been embarrassed to say, “Were doing quite well!” We have some scrapes and bruises as there have been a few investments that have been negatively impacted by the real estate or banking and credit crisis, but overall we are in good shape. We have tried to maintain open communication with all of our clients, especially those that are facing specific issues from economically affected investments.

Though we have not been thrilled with the way the markets have treated some of the investments we hold, we stay firmly involved to ensure that our client’s questions and concerns are being answered or at least addressed. In addition we are continually looking for ways to resolve these issues on behalf of our clients. The things that we can control we are controlling, the issues that we have no (or little) control over we are watching very closely.

As the markets fell and eventually bottomed out this past year the partners of LJCooper were prepared to do what was necessary to keep our staff in place and the best interests of our clients firmly in front of us. I am happy to report that LJCooper has not only maintained, but has increased personnel to further assist us and you our clients. More importantly, we have survived without incurring debt; LJCooper can still proclaim that we are debt free. It is our dedication to practice what we preach and operate within our budget that has allowed us to take advantage of the difficult marketplace to add services, needed personnel and remain involved in the industry to voice our clients’ concerns and help bring change to the areas most needed.

The philosophy that we share with and teach to our clientele is the same that we live by: get educated on the issues, be conservative and thoughtful in your choices and by all means do not become a slave to your social overhead. This past year has been a great reminder that living beyond one’s means can be detrimental to our financial welfare. The future is constantly changing and preparation and planning can provide an increased potential for success in your personal ability to overcome most difficulties.

During a recent trip to southern California, I was surprised to see how many investment advisory firms were no longer operating. Their clients have been left to flounder with few answers and no direction. Even here in our own back yard of Utah, many advisors have left the industry or are not returning the many calls from their own clients.

It is our commitment and obligation to provide the level of service that many of you have come to rely on. We cannot guarantee you will always like the answers, but we will communicate clearly, remain available and continue to work towards solutions where possible.

—Craig M. Porter-Rollins, RFC®